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Price paid for machine is $110,000 (VAT $10000 -eligible to get credit) ..additional costs are freight $2000 , import duty $5000, installation exp $1000, initial estimate of dismantling and removing item is $3000. After the machine put to use $1500 spent for maintenance. ....Answer : A. $121,000 B. $108,000 C. $111,000 D. $118,000
According to IAS-16 Cost includes price paid excluiding VAT, delivering cost, impot duty, installation fee and dismantling cost, and repair and maintenace is our expense.so the answer is C. 111,000. and input VAT is recoverable from tax authority.
Double entry is as following:
Dr Cr
Cost (Machine) 100,000
Delivering cost (Machine) 2,000
Import Duty (Machine) 5,000
Installation fee (Machine) 1,000
Dismantling cost (Machine) 3,000
Input VAT (Recoverable) 10,000
Cash or bank 121,000.
purchase price $110,000
less: VAT ($10,000)
Add:Freight $2,000
Add:Import duty $5,000
Add:Installation $1,000
Add:Dismantling $3,000
Total : $111,000
Initially, the cost should be at $121,000. The maintenance costs should form part of the cost of the asset SUBSEQUENTLY and capitalized, PROVIDED it is NOT an ordinary maintenance because if it is, the $1,500 is expensed outright.
هل تحتاج لمساعدة في كتابة سيرة ذاتية تحتوي على الكلمات الدلالية التي يبحث عنها أصحاب العمل؟
